The UK manufacturing sector grew more than initially estimated in December amid a slight easing of supply chain delays, according to a survey released on Tuesday.
The IHS Markit/CIPS manufacturing purchasing managers’ index printed at 57.9 in December, down from November’s three-month high of 58.1 but up from an initial reading of 57.6. A reading above 50.0 signals expansion, while a reading below indicates contraction.
The survey found that output rose across the consumer, intermediate and investment goods sectors during, with the overall pace of expansion improving to a four-month high.
Rob Dobson, director at IHS Markit, said: “UK manufacturing production rose at the quickest pace in four months in December, supported by increased intakes of new work, efforts to reduce backlogs of work and higher employment. While the uptick in growth is a positive step, the upturn remains subdued compared to the middle of the year, as supply chain constraints and weak export performance constrained attempts to raise production further. Manufacturers indicated that logistic issues, Brexit difficulties and the possibility of further Covid restrictions (at home and overseas) had all hit export demand at the end of the year.
“Although supply chains remain severely stretched, there are at least signs that the situation is stabilising, with vendor delivery times lengthening to the weakest extent for a year in December. This helped take some of the heat out of input price increases, but cost inflation remained sufficiently steep to necessitate the sharpest rise in factory gate selling prices on record. With restrictions and Omicron cases both rising, the growth and inflation backdrops could change again in the early part of 2022.”
